Value of a Business Plan
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I just came across some groundbreaking news on Business Week Online. According to a recent study conducted by the The Journal of Small Business Strategy, Chief Executives at startup companies say that the business plan is a valuable tool, both in terms of raising funds for a startup, and in conducting ongoing operations of the business.

[sarcasm] Wow, what a surprise. [/sarcasm]

The business plan will always be a valuable tool if it is well thought out, well written, and well articulated. And of course, in the end, the true test of the plan is how well it is executed upon.

I can attest firsthand to the value of a busienss plan. During my MBA experience at the University of Michigan, I created and pitched an award winning business plan on the business plan competition circuit. **By the way, I encourage all MBA students and aspiring entrepreneurs to become involved with these competitions.** After winning over $170,000 in cash prizes, in-kind services, and committed capital - it can hardly be argued that a b-plan holds no value. What's great about these competitions, is that they are judged by real VC and entrepreneurs who are concerned with the caliber of the business plan itself. Adept students can therefore take an off-the-shelf concept (check your local tech transfer office) and create a plan around it. The best part is that these competitions judge the plan itself, rather than a company, a concept, IP, or otherwise. The bottom line is that the VCs who are involved with these competitions obviously hold a the business plan in high regard, and would-be entrepreneurs should understand this before external funds are solicited. A well written plan can also attract a stronger valuation as well as high caliber, high integrity investors.

What's more, the value of a business plan extends well beyond the world of entrepreneurship. For instance, I am currently drafting a business plan in my new role at Microsoft. For those of you that might find yourselves working in a corporate environment inthe future, be aware that internal stakeholders will be just as concerned with the aforementioned assets of a well written, well executed business plan, as are those in a private company setting.

posted by Jake B. @ 9:34:00 PM